Hinduja Group's newly-floated Ashok Leyland Defence Systems Ltd (ALDS) and German company Krauss-Maffei Wegmann (KMW) GmbH Tuesday signed a memorandum of understanding (MOU) Tuesday for development of advanced defence systems for India and others. The scope of the deal will initially include the development of armoured wheeled vehicles, recovery vehicles, artillery and combat systems, bridge laying systems and other similar products.

As per the understanding, the German company will provide the technology and the technical assistance that will be required for the development of these defence systems by the Indian company. Hinduja group's flagship company and commercial vehicles major Ashok Leyland holds 26 percent in the newly-formed ALDS with a mandate to design and develop defence logistics and tactical vehicles, defence communication and other systems.

Speaking about the deal, ALDS chairman V. Sumantran said: 'This strategic partnership seeks to harness the formidable skills of both companies, namely, the technological bandwidth of KMW and our approach to innovations aimed at cost advantage. For ALDS, this brings a new range of product opportunities with which we hope to fulfil India's growing defence needs and over time to address select overseas markets.'

According to Ashok Leyland officials, ALDS is a new company and formed by hiving off of the former's defence business. Ashok Leyland's defence business consists of supply of vehicle kits to the army's vehicle factory at Jabalpur and fully-built vehicles.